Following yesterday’s major up thrust, today saw relatively flat markets as the big moves were digested and GBP remained quiet. The MCIX did play some catch-up rallying 0.5% although the AIM -All-Share remained stubbornly mute. The TechMARK had yet another good day up 0.6% as SDL, AVV and COB advanced.
O&G producers retained yesterday’s gain and continued to rally up 0.5% while Pharm added 0.6% . Another jump in iron ores prices saw Ind Metals gain almost 4% with FXPO up over 8%. Construction and Materials was bolstered by good housebuilders earning reports today sending the sector up over 1%.
Brent rallied 0.5% after briefly dipping to its 21EMA and bouncing; it has been above this MA since the 4 Jan 19 and looks set to hold this for now as the short-term trend remains intact and an ascending triangle is forming on crude; this is normally bullish although it can break south on occasion.
With oil up, GBP down and a rally underway in commodity prices, the UK markets seem likely to remain buoyant in the short to medium term. The political risk from Brexit still remains in the background although market participants may well have discounted this risk expecting a delay to any substantive moves.
Market sentiment is pretty benign with the US VIX at 15, UK VIX at 12.5 and the Fear and Greed index at 64(Greed). For now this rally is holding and as all of the indices approach their 200MAs , may well be tested in the coming days